Today at the ALIS Conference, Hiltonwas expected to announce something new – it’s been made clear that it wouldn’t have been their new lifestyle boutique brand, but possibly an extended stay brand.

Logo for Home2 Suites by Hilton

Hilton ended up announcing the launch of Home2 Suites by Hilton. An extended stay hotel with primarily one room suites at a price point averaging $100 a night – lower priced than their Homewood Suites brand, with a modern and edgy feel that would attract those born in the millennial generation – those born between 1982 and 2002 – without feeling like a Motel 6 or Studio 6.

They also launched a website at http://www.home2suites.com which shows a lot of renderings of the interior, exterior and also standard floorplans for the prototype. While the exterior of the building is very square – much like most of the newer limited-service hotel design prototypes coming out these days, it does have a bit of an industrial building look – perhaps taking a design hint from the popularity of the lofty industrial look that some condo developments are turning into.

Exterior Rendering of Home2 Suites

Hilton’s name choice of Home2 is also interesting. The 2 portion is meant to construe that the hotel is you’re second home, or home away from home – very smart, but it also plays a bit into technology by connotating version 2 – version 1 being your main home. The fact that the name of the brand is “Home2″ rather than “Home 2″ also demonstrates some 21st century naming. I like that branding, but maybe because I’m so technology oriented – it just reminds me waay to much of technology – “Home” meaning homepage, and the 2 meaning version 2.

The interior of the hotel plays out similar to Starwood’s Element, right down to the “community tables”  and “gathering zones” that are noted on the Home2 website.

The rooms are designed to fit alot in a very little space – unlike Element, there only seems to be two room sizes – the normal size that is reflected in the pictures, and a “Queen Suite” which actually has two rooms – the bedroom and the living room/media area. There is also an ADA Accessible suite which seems to take the same design as the Queen Suite – but it has larger doors and the bathroom is more accessible to those in wheel chairs.

Something that I always liked aboutStarwoods Element (and Aloft) room design is the unconventional placement of furniture and fixtures. Anyone who has seen an aloft room picture knows how the bed is in the center of the room behind a wall which has the sink and bathroom. The Element room has a somewhat similar design, but in some suites it has a wrap-around couch and a partition between the sitting/kitchen areas.

Home2 Suites Room Cross Section

The Home2 design disappoints because from the looks of it, you walk into the room, on one entire wall is a table which has the kitchen counter, workspace and space for the tv. Below the counter are drawers clothes, dishes, etc. On the other wall is the bathroom, bed and couch. It’s really a very traditional hotel room design which at this point is a little boring. On the other hand, the design they used for some aspects – a headboard/night table piece that extends from the left and right of the bed, making it feel a little more luxurious, and fixtures that you’d expect to find in a W rather than a Hilton hotel.

Overall its a great concept, especially in the current economy when Extended Stay hotels are experiencing higher occupancy than standard hotels. The fact that the Home2 concept is centered around a cost effective design also plays well with developers who are not looking to drop 30 million on a hotel. Hilton has suggested that the rooms would cost 70-75k a key, which is very very inexpensive – especially for an extended stay room which has more build out due to the kitchen that’s included in every room.

Hilton is looking to build the first 100 hotels by 2012, with the first one to begin construction within 6 to 12 months and probably opening toward the end of 2010. 10 hotels are currently in the pipeline, but there is no word as to where the first locations will be yet.

Hilton was starting to worry me for awhile, but after this announcement, and the lifestyle brand announcement coming in March, it looks like Hilton is finally on a turnaround.

UPDATE

1. The initial locations in the pipeline are located in New York City, N.Y., Baltimore/White Marsh, Md., Charlotte, N.C., Jacksonville, N.C., Gadsden, Ala., Alabaster, Ala., Elko, Nev., and three hotels in San Antonio, Texas.

2. The hotel room types are split between 80% studios and 20% 1 bedrooms

andrew@alconic-inc.com

Wow. This was a surprise!

It’s great news for the Washington DC area in this down economy, and pretty much makes the Washington DC area the lodging capital of America. In addition to Hilton - Choice Hotels (located in Silver Springs, MD) and Marriott (located in Bethsada, MD) plus a large number of hotel management and hotel investment companies are all located within the metro Washington DC area.

I’m very curious as to why this move was made in the first place, even though Hilton has been headquartered in Beverly Hills for decades, a move across the country is a huge undertaking, requiring almost all staff to either move with the company or look elsewhere for work. Does Hilton have the confidence that they will still be able to keep their talent after the move? It’s asking a lot to uproot families from an area that they most likely have grown up in to move to an unfamiliar area – with their other choice being to look for a new job in a horrible job market. I’d say it’s a way for Hilton to encourage attrition without having layoffs, but the costs of moving a headquarters operation is much more expensive than it would cost for layoffs and severance packages.

It’s been suggested that a major reason for the move to the DC Metro area is due to the abundance of hospitality talent in the area, but that’s not good enough reason on its own to move a major international firm’s headquarters over 2,000 miles away. There is no doubt that Hilton is on the verge of a huge corporate change – the launch of Project Global 21, and another major announcement to be made on Monday at ALIS, plus the new regime installed once Blackstone purchased and finally seems to be ready to put Hilton back on the map in terms of being an aggressive competitor in the domestic and international hotel field.

This talk about Hilton moving reminds me of Starwood’s big move from Phoeniz, AZ to NY after they bought Westin & Sheraton, and in 2006 Starwood even announced plans for another major move – from its 200,000 sqft headquarters in White Plains to at 400,000 sqft headquarters either Norwalk, or Stamford, CT or another location in Westchester County, NY. Since that announcement was made, nothing has been said and I think it’s safe to assume that any plans to move to another headquarters is just not viable because of the economic climate.

One good thing about the Hilton move is rent would be alot less expensive than it would have been a few years ago, and it also gives Hilton the ability to start with a clean slate in office design and environment helping employees feel immersed in what they are working for…

Plus – Hilton is alot closer to NJ, where I live, and with the possiblity of all these job openings, maybe thats where I can start to make my mark in hotel development.

andrew@alconic-inc.com

ALIS is coming up in two weeks where Hilton is expected to be announcing their Extended Stay brand, and then in March, they will announce their “global lifestyle brand” codenamed Project Global 21. The news that really piqued my interest and told me that Hilton was finally on its way and Blackstone’s money wasn’t wasted was an email I received which advertised the “Hilton Prestige Portfolio” which is what Ross Klein is in charge of.

From the current indications – hes been quite a busy person since he resigned at Starwood and moved to Hilton’s Beverly Hills headquarters earlier in 2008. 

(Click To Enlarge)

There has been alot of talk about the repositioning of the Conrad brand and the breaking out of the Waldorf=Astoria brand, and it looks like 2009 will be the year it happens.

It looks like Conrad will come out to be the global luxury brand of Hilton – focusing on the luxury business traveler, vs families or vacationers.

Its interesting that Hilton is putting its luxury brands into their own “group” very similar to how Starwood put their luxury brands into the “Luxury Brand Group” and Starwood even went so far as to put the headquarters for that division in New York City – rather than Starwood’s headquarter complex in White Plains, NY.

I also found it interesting how much Hilton is differentiating the Waldorf Astoria in New York City with the rest of the Waldorf Astoria collection. It’s obvious that Hilton took the idea that Starwood & Barry Sternlicht had when he took the St Regis in New York and built an entire hotel brand around it – St Regis Resorts. Hilton differs from Starwood by continuing to set the original Waldorf Astoria  apart from the other hotels in the Waldorf Astoria Collection, which continues to respect and elevate the original brands namesake from the rest, I think most would agree that original St Regis in NYC has lost a bit of its luster when it was joined, yet not really differentiated from in a marketing standpoint from the other St Regis’s around the world.

Another change that I’ve noticed recently is the look of the Waldorf Astoria Collection’s website. It looks strikingly similar to the LXR Resorts website – same font, same layout, same search options, I know the reason behind it (I’ll explain in a minute) but it just makes you chuckle a little. LXR’s layout and design is so clean, and smooth it exudes luxury – without making you think Victorian or 19th century. That is the same image that Hilton seems to want to give Waldorf Astoria Collection.

Waldorf=Astoria Collection Website

LXR Resorts Website (Click to Enlarge)

Without a doubt the most exciting thing to come from Hilton is their Boutique brand. Project Global 21 has been in the works since 2007 – and I’m sure its been much longer than that. Out of the major international brands, Hilton is the last entrant in to the boutique hotel field and they realize they have alot of catching up to do. After they were purchased by Blackstone the whole Hilton empire was questioned, but I think now its clear as to the direction where the Hilton brands are going and that Blackstone will not hold them back.

It will be interesting to see what the Project Global 21 announcement in March is, I’ll be keeping my eyes open and ears close to the ground, because what I’ve been hearing about the brand sounds great.. A brand that specializes in conversions, yet manages to still keep its identity. A brand for “the soccer mom” who wants to be in a modern/trendy hotel, but feels overpowered by the W, or Andaz concept which can be a little overwhelming for a family of 4 from suburban America. I’ve also heard that the brand will launch with “products” which makes me wonder what they are going to be selling… The whole idea of calling it a “lifestyle” brand rather than a boutique brand – it’s either marketing speak or really is a different concept, we’ll have to find out.

andrew@alconic-inc.com

Hilton has announced a press event during the conference about their “new development concept”, and one of their executives has stated how the announcement may be one of the “worst kept secrets in the industry”. Hilton took Ross Klein from Starwood Hotels earlier this year to spearhead the creation of a much needed boutique brand.

Hilton is in the minority at this time by not having a boutique brand – every one of Hilton’s competitors has a boutique brand and it is a market that Hilton is noticably absent from.

Is Hilton Too Late?

With the economy and the credit markets in the toilet (to be nice about it), why would Hilton want to announce a brand new hotel brand? The boutique hotel customer now has alot of choices both high end and low end (NYLO/aloft), and with Marriott & Schrager’s Edition – the possibility arises of competitor who will once again re-define the boutique hotel industry. What can Hilton and Klein possibly offer? 

Everyone knows that this economic downturn will not last forever, and in order for companies to grow in the future – they have to plan for the future, and anticipate what their guests and customers will want in the future (unlike.. GM… Who still has zero clue as to what their customers want.) so Hilton is making the right move by developing a boutique product and even announcing it in this type of market. Yes, they are very very late – W Hotels has had a 10 year start, but in 20 or 30 years it wont matter, and developers who like working with Hilton will want a boutique product from them.

Not much has been said about the brand, but its been the worst kept secret because everyone knows they are going to announced a boutique brand, but thats about all the industry knows. I’ve found out that the food and beverage service will probably be outsourced by a well known chef or culinary company. That’s a great idea if they pick a high caliber name, but it also runs the risk of diluting the brand of whoever they choose, making it not as exclusive as they’d want. 

I’ve also been able to find out that the brand will be 4.5 stars and each property will contain on average 200-300 rooms. Lastly, it will be very “conversion friendly” which is great for Hilton because it will allow new hotels to be added to the system very fast since a renovation will take much less time than a completely new-build hotel. By going that route Hilton walks a thin line because a hotel may have originally been designed as a Sheraton, or a Hilton, or even a Courtyard so that the layout and building construction fit that brand identity – being rebranded as this new brand may confuse and dilute the brand identity they are trying to achieve. One of the most important parts of creating or building a brand is having the same look and appearance in their buildings – picture a McDonalds in a building originally designed for Wendys, or a Taco Bell in a building originally designed for a Dunkin Donuts.. It can happen, but it’s going to look funny. 

I’m very interested to see how this will pan out – focusing on conversions will ensure a quick and relatively inexpensive growth, but the core DNA of the brand may be hurt.

Hilton has alot on their plate right now – I think one of the biggest issues is public perception and the difference between some of their brands and the individual identity of those brands, specifically Doubletree, Waldorf=Astoria & Conrad. According to their CEO, that is something they are aware of and working on – in 2009 Hilton is expected to increase the brand identity of Waldorf=Astoria & Conrad – hopefully that will go for the Doubletree brand as well. Now more than ever branding is important to ensure that customers will keep coming back to your locations – and pay more for your services because of their perceived value.

Prior to Blackstone’s purchase of Hilton, the company never seemed to have a clear direction – demonstrated by the fact that until just prior to the Blackstone acquisition, the Hilton in North America was different from the Hilton in the rest of the world – severely limiting the growth and the ability for the different hotels to work together. Now with Blackstone Hilton is finally getting back on the right foot – including the creation of a boutique brand.

andrew@alconic-inc.com

I haven’t been able to find a working website yet, www.EditionHotels.com does not lead to anything, (as of 9:30AM 1/29/08) but I checked the WHOIS record for EditionHotels.com and it was purchased by the Ian Schrager Company on November 1st, 2008.

According to two articles today, one in the Los Angeles Times and the other in the Washington Post, the first Editions are going to be in Paris and South Beach (a renovation/re branding of the South Beach Marriott)- the Paris property being the first to open in 2010.

Choosing the name “Edition” is actually genius – each hotel will be called “Town” Edition, for example, Los Angeles Edition, New York Edition, so on and so forth, currently they are expecting to open locations in Los Angeles, Chicago, Scottsdale, Costa Rica and Madrid. No word yet on the obligatory New York city location, but with Schrager supposedly working on a hotel in the Chelsea section, it is a possibility that one may open there – although I would expect New York’s first Edition to be in a more high-profile area. Supposedly they are working on another 20 deals

There are no renderings or logo or any details yet on what what the hotel experience will look like – hopefully they will launch a website today which will provide some information on that – but it is expected that the hotels will be easily recognizable as Ian Schrager products. Until more details are provided its difficult to tell if it will blow away W Hotels, or just finally be a serious competitor to the brand – it’s only taken Marriott 10 years!

Well, so far so good with this Schrager/Marriott partnership – I seriously had doubts that their partnership would go smoothly, but apparently they have so far proved everyone wrong. As I’ve stated before, I’m not a huge fan of Marriott – not because I don’t respect them, I do – they have a great business and are very well known but, their hotel product doesn’t excite me..

The potential of Edition Hotels does.

andrew@alconic-inc.com

This year, the conference is from Jaunary 28th, to 30th at the Hyatt Regency Century Plaza in Los Angeles, CA, and I’m really excited to see what announcements are going to be made this year. The ALIS Conference is the one place where almost every hotel brand has an appearance, either on the exhibit floor or via a presentation, and it also seems to be where most of the major announcements are made for the year. Ok, maybe not the major announcements for the year – but every year something is announced which is in the headlines of the industry publications – and sometimes mainstream media for a few weeks after the fact.

Here are a few announcements that I think/am almost positive will be made this week:

1. Starwood Captial’s Le Crillon brand, and an overall update of Starwood Capital’s Hotel Groups plans.
2. The launching of Starwood’s aloft & element websites (aloft’s site was already launched today, Sunday 1/27/08).
3. Marriott & Ian Schrager’s new brand. The name, renderings, and locations of the initial few properties.
4. ALOT of announcements with the whole “Green Movement”.

And hopefully there will be a few surprises as well! I’m hoping to be able to post as much information as possible when I come across it over the next few days.

andrew@alconic-inc.com